CHAPTER 207
INSURANCE COMPANIES AND HEALTH CARE CENTERS TAXES

Table of Contents

Sec. 12-202a. Tax on net direct subscriber charges of health care centers. Exceptions.
Sec. 12-211a. Limit on credits under this chapter. Exceptions.

      Sec. 12-202a. Tax on net direct subscriber charges of health care centers. Exceptions. (a) Each health care center, as defined in section 38a-175, that is governed by sections 38a-175 to 38a-192, inclusive, shall pay a tax to the Commissioner of Revenue Services for the calendar year commencing on January 1, 1995, and annually thereafter, at the rate of one and three-quarters per cent of the total net direct subscriber charges received by such health care center during each such calendar year on any new or renewal contract or policy approved by the Insurance Commissioner under section 38a-183. Such payment shall be in addition to any other payment required under section 38a-48.

      (b) Notwithstanding the provisions of subsection (a) of this section, the tax shall not apply to:

      (1) Any new or renewal contract or policy entered into with the state on or after July 1, 1997, to provide health care coverage to state employees, retirees and their dependents;

      (2) Any subscriber charges received from the federal government to provide coverage for Medicare patients;

      (3) Any subscriber charges received under a contract or policy entered into with the state to provide health care coverage to Medicaid recipients which charges are attributable to a period on or after January 1, 1998;

      (4) Any new or renewal contract or policy entered into with the state on or after April 1, 1998, to provide health care coverage to eligible beneficiaries under the HUSKY Plan, Part A, HUSKY Plan, Part B, or HUSKY Plus programs, each as defined in section 17b-290;

      (5) Any new or renewal contract or policy entered into with the state on or after February 1, 2000, to provide health care coverage to retired teachers, spouses or surviving spouses covered by plans offered by the state teachers' retirement system;

      (6) Any new or renewal contract or policy entered into on or after July 1, 2001, to provide health care coverage to employees of a municipality and their dependents under a plan procured pursuant to section 5-259;

      (7) Any new or renewal contract or policy entered into on or after July 1, 2001, to provide health care coverage to employees of nonprofit organizations and their dependents under a plan procured pursuant to section 5-259;

      (8) Any new or renewal contract or policy entered into on or after July 1, 2003, to provide health care coverage to individuals eligible for a health coverage tax credit and their dependents under a plan procured pursuant to section 5-259;

      (9) Any new or renewal contract or policy entered into on or after July 1, 2005, to provide health care coverage to employees of community action agencies and their dependents under a plan procured pursuant to section 5-259; or

      (10) Any new or renewal contract or policy entered into on or after July 1, 2005, to provide health care coverage to retired members and their dependents under a plan procured pursuant to section 5-259.

      (c) The provisions of this chapter pertaining to the filing of returns, declarations, installment payments, assessments and collection of taxes, penalties, administrative hearings and appeals imposed on domestic insurance companies shall apply with respect to the charge imposed under this section.

      (May Sp. Sess. P.A. 94-4, S. 49, 85; P.A. 95-160, S. 64, 69; June 18 Sp. Sess. P.A. 97-11, S. 57, 65; P.A. 98-110, S. 25, 27; P.A. 00-174, S. 78, 83; P.A. 01-30, S. 3, 4; June 30 Sp. Sess. P.A. 03-6, S. 65; P.A. 04-218, S. 14; P.A. 05-238, S. 2; P.A. 10-179, S. 47; June Sp. Sess. P.A. 10-1, S. 34; P.A. 11-25, S. 1; 11-44, S. 123.)

      History: May Sp. Sess. P.A. 94-4, S. 49, effective January 1, 1995, and applicable to premiums due on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; June 18 Sp. Sess. P.A. 97-11 exempted new or renewal contracts and policies with the state on or after July 1, 1997, to provide health care coverage to state employees, retirees and their dependents, and exempted subscriber charges received from the federal government for Medicare patients, effective July 1, 1997; P.A. 98-110 divided the section into Subsecs. (a) to (c), inclusive, and added new Subdivs. (3) and (4) to Subsec. (b) to exempt state contracts under Sec. 17b-28, Husky Plan contracts and state-administered general assistance, effective May 19, 1998; P.A. 00-174 added Subsec. (b)(6) re an exemption for policies entered into with the state providing coverage to retired teachers and by making technical changes for accuracy of reference, effective May 26, 2000; P.A. 01-30 added Subsec. (b)(7) and (8) to exempt contracts or policies procured under Sec. 5-259 that cover employees of municipalities or nonprofit organizations, effective July 1, 2001; June 30 Sp. Sess. P.A. 03-6 added Subsec. (b)(9) re new or renewal contracts or policies entered into on or after July 1, 2003, for coverage of health coverage tax credit eligible individuals, effective August 20, 2003; P.A. 04-218 amended Subsec. (a) to specify applicability of section to centers governed by Secs. 38a-175 to 38a-192, inclusive, and to specify that the tax applies to charges approved by the Insurance Commissioner, effective June 8, 2004, and applicable to income years commencing on or after January 1, 2005; P.A. 05-238 made technical changes in Subsec. (b), amended Subsec. (b)(7) to include dependents, added Subsec. (b)(10) and (11) re employees of community action agencies and their dependents and re retired members and their dependents, effective July 1, 2005, and applicable to income years commencing on or after January 1, 2005; P.A. 10-179 amended Subsec. (b)(3) by deleting reference to Medicaid managed care program and amended Subsec. (b)(4) by deleting references to Medicaid and HUSKY Plus programs, effective July 1, 2010; June Sp. Sess. P.A. 10-1 added reference to HUSKY Plus programs in Subsec. (b)(4), effective July 1, 2010; P.A. 11-25 made technical changes in Subsec. (b)(4); P.A. 11-44 amended Subsec. (b) by deleting former Subdiv. (5) re contracts to provide health care coverage to recipients of state-administered general assistance and redesignated existing Subdivs. (6) to (11) as Subdivs. (5) to (10), effective July 1, 2011.

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      Sec. 12-211a. Limit on credits under this chapter. Exceptions. (a)(1) Notwithstanding any provision of the general statutes, and except as otherwise provided in subdivision (3) of this subsection or in subsection (b) of this section, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for any calendar year shall not exceed seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to such calendar year of the taxpayer prior to the application of such credit or credits.

      (2) For purposes of this subsection, "type one tax credits" means tax credits allowable under section 12-217jj, 12-217kk or 12-217ll; "type two tax credits" means tax credits allowable under section 38a-88a; "type three tax credits" means tax credits that are not type one tax credits or type two tax credits; "thirty per cent threshold" means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit; "fifty-five per cent threshold" means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits; and "seventy per cent threshold" means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.

      (3) For calendar years commencing on or after January 1, 2011, and prior to January 1, 2013, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter shall not exceed:

      (A) If the tax credit or credits being claimed by a taxpayer are type three tax credits only, thirty per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits.

      (B) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type three tax credits, but not type two tax credits, fifty-five per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type one tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, and (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold.

      (C) If the tax credit or credits being claimed by a taxpayer are type two tax credits and type three tax credits, but not type one tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, and (iii) the sum of the type two tax credits and the type three tax credits being claimed may not exceed the seventy per cent threshold.

      (D) If the tax credit or credits being claimed by a taxpayer are type one tax credits, type two tax credits and type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) type three tax credits shall be claimed before type one tax credits or type two tax credits are claimed, and the type one tax credits shall be claimed before the type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold, and (iv) the sum of the type one tax credits, the type two tax credits and the type three tax credits being claimed may not exceed the seventy per cent threshold.

      (E) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type two tax credits only, but not type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) the type one tax credits shall be claimed before type two tax credits are claimed, (ii) the type one tax credits being claimed may not exceed the fifty-five per cent threshold, and (iii) the sum of the type one tax credits and the type two tax credits being claimed may not exceed the seventy per cent threshold.

      (b) (1) For a calendar year commencing on or after January 1, 2011, and prior to January 1, 2013, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such calendar year may exceed the amount specified in subsection (a) of this section only by the amount computed under subparagraph (A) of subdivision (2) of this subsection, provided in no event may the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such calendar year exceed one hundred per cent of the amount of tax due from such taxpayer under this chapter with respect to such calendar year of the taxpayer prior to the application of such credit or credits.

      (2) (A) The taxpayer's average monthly net employee gain for a calendar year shall be multiplied by six thousand dollars.

      (B) The taxpayer's average monthly net employee gain for a calendar year shall be computed as follows: For each month in the calendar year, the taxpayer shall subtract from the number of its employees in this state on the last day of such month the number of its employees in this state on the first day of the calendar year. The taxpayer shall total the differences for the twelve months in the calendar year, and such total, when divided by twelve, shall be the taxpayer's average monthly net employee gain for the calendar year. For purposes of this computation, only employees who are required to work at least thirty-five hours per week and only employees who were not employed in this state by a related person, as defined in section 12-217ii, within the twelve months prior to the first day of the calendar year may be taken into account in computing the number of employees.

      (C) If the taxpayer's average monthly net employee gain is zero or less than zero, the taxpayer may not exceed the amount specified in subsection (a) of this section.

      (June 30 Sp. Sess. P.A. 03-1, S. 86; P.A. 11-6, S. 75; 11-61, S. 48; Oct. Sp. Sess. P.A. 11-1, S. 54.)

      History: June 30 Sp. Sess. P.A. 03-1 effective August 16, 2003; P.A. 11-6 designated existing provisions as Subsec. (a)(1) and amended same to change "income year" to "calendar year", added Subsec. (a)(2) re two-year 30% cap on credits and added Subsec. (b) re allowable credit for average monthly net employee gain, effective May 4, 2011, and applicable to calendar years commencing on or after January 1, 2011; P.A. 11-61 amended Subsec. (a) by adding new Subdiv. (2) re definitions, re designating existing Subdiv. (2) re tax credit limit as Subdiv. (3)(A) and adding Subdiv. (3)(B) to (E) re amount of allowable tax credits, and amended Subsec. (b)(2)(C) by replacing reference to 30% limit with reference to amount specified in Subsec. (a), effective June 21, 2011, and applicable to calendar years commencing on or after January 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (a)(2) by adding Secs. 12-217jj and 12-217kk as type one tax credits, effective October 27, 2011.

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